Shopping sites critical to retailers: Hitwise's Tancer

NEW YORK - For many consumers shopping comparison engines are the first stop on the road to purchase and that is why it is important to look at the correct metrics to measure the success through this shopping channel.

So said panelists Oct. 11 at "Boosting the ROI of Shopping Comparison Engines," a search engine strategies track at Shop.org's annual summit. Many shopping engines acquire a lot of traffic, but at the same time they can be expensive and flawed, and as a result may challenge the ROI.

"Shopping comparison sites have grown in importance as a source of traffic to retail sites," said Bill Tancer, general manager of global research at Hitwise, San Francisco. "Right now shopping comparison sites are responsible for about 4.2 percent of the traffic being sent to retail sites, up 0.7 percentage points from two years ago."

Mr. Tancer said the top shopping comparison engines last year experienced the most significant growth - more than 16 percent during the holiday season.

The demographics of visitors to these sites are mostly individuals between the ages of 18-24 and these sites tend to "swing female," with incomes of $30,000 to $100,000 annually, he said.

Ninety percent of consumers seeking to purchase electronics first visit comparison shopping sites. Although these individuals do not all convert right on the spot, the research they conduct on the comparison site will most likely what influences their decision in the end run, said Paul O'Brien, interactive marketing manager at HP Shopping.

"Our research indicates that 36 percent of consumers conduct research on comparison shopping sites 10 days prior to purchase," Mr. O'Brien said. "Forty percent use them throughout research."

Almost half of online consumers consider comparison shopping sites the best source of options, more than any other channel.

"But it is important to remember that usage varies by product," Mr. O'Brien said. "The majority of consumers would say that they use these sites to influence their decision to buy. "In order to improve ROI, you must use a vendor to manage comparison sites and leverage your feed for more than comparison shopping."

David Dwek, managing director of Etronics.com, confessed that he "hates" shopping engines.

"The top four comparison shopping sites have [a] $500-plus million market value, yet none have 24-hour support," Mr. Dwek said. "None have alert systems when their servers fail. They take about 36 hours to correct errors and many drive traffic by buying your brand name on search engines."

Cost-per-click rates have soared by 35 percent, while the traffic to shopping sites is up 15 percent to 30 percent.

So what are merchants working with shopping engines to do?

Mr. Dwek suggested three assumptions: Everyone is incompetent, no one is telling the truth and it does not matter who makes the mistake - you will pay for it in some way or another.

"Things will go wrong," he said. "Success depends on developing systems that allow you to identify problems quickly and fix them."

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